Anti-Russian sanctions: threats and paradoxes

By Vestnik Kavkaza
Anti-Russian sanctions: threats and paradoxes

The bill on new sanctions against Russia, North Korea and Iran, adopted by the House of Representatives of the US Congress and approved by the Senate, should now be signed by President Donald Trump. He has the right of veto, but Congress can easily overcome it. The bill suggests that US President can impose sanctions on persons who intend to invest more than $5 million over a year or a million at a time in the construction of Russian export pipelines or support projects with technologies, provide informational support. At the same time, the US will continue to oppose construction of the Nord Stream-2 gas pipeline.

Head of the Energy Security Problems Center of the American and Canadian Institute at the Russian Academy of Sciences, Andrei Korneyev, believes that the bill is aimed at creating a lot of difficulties for the Russian Federation in those directions that can help it to strengthen its economic and political sovereignty:

- The document notes that the US support Ukraine and counter all actions of the Russian Federation, which can be considered hostile. 

- The bill emphasizes that the US don't accept Crimea as part of Russia.

- The document envisages a number of financial, organizational and tax measures to help reform Ukraine's energy sector and reduce Ukraine's dependence on Russian energy resources.

- It also envisages counteraction against implementation of the Nord Stream-2 gas pipeline project.

- The bill envisages possible additional sanctions against state-owned enterprises of the Russian Federation, which carry out operations in the metallurgical, mining and railway transport sectors.

- The bill also strengthens sectoral sanctions against financial sector of the Russian Federation and the entire Russian energy industry.

- The bill allows President of the United States, in coordination with allies, to impose sanctions against both individuals and legal entities that contribute to the development or support Russian export oil and gas pipelines.

- The bill envisages creation of a fund to counter Russian influence. Around $250 million will be allocated for it before the end of this year.

- Around $30 million will be allocated by the end of this year to support energy security of Ukraine.

"In this case, we can see not just attempts to complicate the development of Russian energy sector, but also an attempt to create a threat to the constitutional order of our country, as well as to the sovereignty and territorial integrity of our country," Andrei Korneyev believes.

Nikolai Platoshkin, head of the Department of International Relations and Diplomacy of the Moscow Humanitarian University, noted that American bill became less strickt under European influence, but everyone worry about the fate of Turkish Stream and Nord Stream-2 projects. "These projects are active, in other words, they don't fall under new sanctions. This situation may be very ridiculous. The law says that Ukrainians must liberalize domestic gas market. If Ukraine does this, then the prices will grow. But most importantly, if some companies (Western, American) will modernize Ukraine's transit and gas system, they will be subjected to US sanctions, because these gas pipelines are still used for export of Russian gas."

According to Platoshkin, the bill has two sanctions, which are in force already: "I'm talking about the ban on investing in new projects of Russia's export gas pipelines. If some foreign company invests more than $5 million, it will be subjected to sanctions. This also applies to Ukraine. In addition, there's also a ban on participation in more than $10 million a year privatization in Russia, if this privatization will bring specific material benefits to members of Russian government or their families."

Commenting on the fact that Americans are lobbying their energy supplying interests, the expert noted: "The bill says that it should help the export of US energy resources abroad and create jobs, but the US accounts for only 0.3% of the world's liquefied gas export. Americans tried to gain foothold in the markets of Japan and South Korea, but right now supplies of American liquefied natural gas go to Chile and Argentina. That's why Americans modernized the Panama Canal. Chile can pay, right now there are the highest prices."

"By the way, thanks to Gazprom's policy, which seriously reduced the price of gas, consumption is rising once again, despite all the sanctions," he stressed.

Head of the Department of International Organizations and World Political Processes of the Moscow State University Andrey Sidorov noted that previously US sanctions did not damage sensitive sectors of Russian economy. "The first Cold War began when Marshall Plan was adopted, when Stalin realized that Americans try to damage painful sectors directly, try to level out everything the USSR gained during and after the Second World War. Right now this challenge also concerns a very important industry for Russia, the economy. That is why we have to respond. But how? Stopping aluminum supplies means inflicting damage on ourselves. It is necessary to develop a set of measures that will affect our economy to a lesser extent, but will do painful things to American economy," Andrey Sidorov said.

The Russian Foreign Ministry released following statement: "The adoption of the new sanctions bill is an obvious indication that relations with Russia are in thrall to the political infighting in the United States. Moreover, the new bill sets to a goal to create a dishonest competitive advantage for the US in the global economy through the use of political means. This blackmail aimed at restricting Russia’s cooperation with its foreign partners threatens many countries and international businesses.

Despite Washington’s constant outbursts, we have adhered to responsible and reserved behaviour and have not responded to express provocations until now. However, the latest events confirm that certain circles in the US are fixated on Russophobia and open confrontation with our country.

- Therefore, we suggest our American counterparts bringing the number of diplomatic and technical staff at the US Embassy in Moscow, the consulates general in St Petersburg, Yekaterinburg and Vladivostok, into strict correspondence with the number of Russian diplomats and technical staff currently working in the United States, until September 1, 2017. This means that the total number of American diplomatic and consular office employees in the Russian Federation must be reduced to 455 people. In the event of further unilateral action on behalf of US officials to reduce the Russian diplomatic staff in the US, we will respond accordingly.

- Starting August 1, the use of all the storage facilities on Dorozhnaya Street in Moscow and the country house in Serebryany Bor will be suspended from use by the US Embassy.

Russia reserves the right to resort to other measures affecting US’ interests on a basis of reciprocity," the statement says.